As a result of a slowdown in operations, Mercantile Stores is offering to employees who have been

Question:

As a result of a slowdown in operations, Mercantile Stores is offering to employees who have been terminated a severance package of $ 100,000 cash; another $ 100,000 to be paid in one year; and an of $ 30,000 to be paid each year for 20 years. Use present value tables to compute the present value of the complete package, assuming an interest rate of 8 percent. Round to the nearest dollar.
Annuity
An annuity is a series of equal payment made at equal intervals during a period of time. In other words annuity is a contract between insurer and insurance company in which insurer make a lump-sum payment or a series of payment and, in return,...